Seven former directors of the former Fortis Bank and Fortis Group at the time of its collapse 12 years ago were today informed that a court in Brussels has ruled that the charges against them have run out of time.
The prosecution of the seven is now dropped, after the prosecutor’s office called for an end to proceedings.
The investigation of Fortis began in 2008, and concerned the period 2007-2008. In 2007, Fortis had carried out a capital increase with an offer to shareholders. However an investigation showed that the banking group had given potential shareholders insufficient information on the bank’s exposure to bad debt from the collapse of the real estate market in the US.
Fortis was also, as a result, having trouble meeting its share of the cost of the acquisition of the Dutch bank ABN Amro, undertaken as part of a consortium with Royal Bank of Scotland and Banco Santander.
The offer to shareholders, the investigating magistrate argued, had failed to reveal the true value of their investment, because bank directors had kept inside information secret.
Nearly 300,000 investors had come forward to attach their own civil case to that of the authorities, as is the custom under Belgian law. On the criminal side, the seven directors were charged with false declarations in the bank’s annual report, fraud and breaches of the law on financial regulation.
However it soon became clear the charge of false statements could not be upheld by the evidence, and as a result the other charges were also at risk of failure.
At the same time, the Dutch authorities had offered a take-it-or-leave-it settlement to Fortis investors, an offer which was taken up by some 290,000 investors, leaving only 150 to continue the case.
They are represented by lawyer Mischael Modrikamen, who today said he would fight the decision to abandon the prosecution.
As a result of the collapse of Fortis, the banking activities were partly nationalised by the Belgian and Dutch government with Luxembourg taking a small stake. The insurance activities were hived off to become Ageas. And the bank was ultimately taken over, along with the name, by the French group now known as BNP Paribas Fortis.